The Hindenburg Hurricane that barrelled through the Indian stock markets in the past fortnight will be remembered for the epic devastation that it wrought. It showed just how brittle the foundations of one of India’s biggest conglomerates really were. Gautam Adani — tarred by talk of crony capitalism — had burst into the ranks of the world’s richest tycoons in less than a decade. But political patronage and paper wealth cannot protect businessmen from a fusillade of accusations if investors start to gnaw on their knuckles and wait for credible answers. The crisis snowballed because of the vicious counter-attack launched by the Adanis against the US-based short seller which intended to scuttle the follow-on public offer of shares by the group flagship, Adani Enterprises. The Hindenburg report was impressive both on scale and in content. As the Adanis initially claimed, a number of the charges had been disclosed by group entities in the past in a variety of documents.

In their defence, the Adanis claimed that the attack on the group was an assault on India. After the issue was pulled, the Narendra Modi government had to grapple with the acute embarrassment of having to extricate itself from a disturbing association. But there was no reason for the finance minister, Nirmala Sitharaman, to make the fatuous assertion that India’s macroeconomic fundamentals would not be shaken by the Adani fiasco. Nobody has ever tried to suggest that the Adani tail would wag the dog. It only goes to show how bluster has corroded the sagacity of a measured response. The Adanis are waiting for the dust to settle before they find alternative sources to raise sorely needed funds to repay legacy debts and bankroll new projects. The Centre’s credibility is also on the line. Not long ago, it had spoken about floating a sovereign bond on overseas markets and hoped that it might be included in one of the top global indices. Global investors have complained in the past about the capriciousness of Indian laws and regulations. Lately, European financial regulators have also raised concerns about the poor regulatory oversight in India. The Adani crisis is serious but it is one of a piece. It is far more important for India to rebuild trust with investors and reawaken faith in the Indian ecosystem.